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March 18, 2013

Early indications about Heseltine response

As the Budget gets gradually leaked in time honoured fashion
(although much less than last year), today is ‘growth’ day, with the focus on
the Government’s response to Heseltine, to be published later today.

We haven’t seen the detail yet but press coverage
(particularly good, as usual, in the FT) so far suggests:

i) 81 out of 89 recommendations have been accepted,
including: the government drawing up a national growth strategy; seconding more
civil servants to the private sector; civil servants being in local growth
teams; and more business engagement in the school curriculum.

ii) Recommendations that haven’t been accepted include:
setting up unitary authorities; setting out plans for new airport capacity in
the south of England before 2015; and beefing up the legal powers of chambers
of commerce. The recommendation for a national growth council has been accepted
‘in part’ which means it hasn’t really been accepted; it’s regarded as existing
already.

iii) The single pot will be implemented, but it’s likely to
be much smaller than Lord Heseltine recommended. It will include skills (but
not apprenticeships), housing and transport, and the exact amount is being
debated in Whitehall at the moment (for which read there’s a big battle going
on, and Whitehall departments are trying to make this as small as possible).
The exact amount will be decided on in the Spending Review.

iv) Much of the money will be channelled through LEPs. Each
will negotiate a local growth deal, presumably along the lines of City Deals,
with the funding allocated depending on the quality of the bid. It will
be interesting to see how this fits with what’s in the core package.

I’ll blog again once I’ve seen the detail. But there’s a missed opportunity if the single pot
is so small that no meaningful work can be done, if everything is channelled
through LEPs and combined authorities are to be ignored (the latest one is in
the North East, announced on Friday – a significant achievement) or if local
areas get a few more instruments to play with but Whitehall still gets to call
the tune. More on this later.